Skip to content

What affects land prices

Tuesday, February 7, 2012

The biggest difference in land value is where it is located.  Land near a city,  a resort, National Park, etc. will command a larger price than land in a common, rural town.  What I am addressing here are the differences in price in the same general area.

The basic ingredients to the relative value of land in the same area have to do with:

  • What is next door (a lake or a run down house, for example)
  • How does the land “feel”  (Have you even walked on a piece of land that just feels “right”?  I have.)
  • Views add value
  • Restrictions add value (if restrictions are important to you)
  • Roadside utilities
  • Easy access
  • Added amenities such as tennis courts add value to a neighborhood.
It really comes down to what is important to you, but more amenities increases the value, but only if they are of value to you.  A piece of land on a back road with no power and no view is worth much less than a lot that that is ready to build on.  But it comes down to what you want to do with the lot.  If you want a weekend getaway, you may not need electricity, or even the ability to drive to it in the winter.
Although views are great for resale value, if you are working on a limited budget, you may not need to pay for the added cost of a view.
In much of Maine, there are very few restrictions on what can be built on land.  If you are worried about what happens on the land next to yours, it may be worth paying extra for an area that has covenants.  Of course if you don’t want someone to tell you that you can’t have pigs in your back yard or you can’t have a mobile home on your lot, then it is important not to have restrictions.

It is amazing to see the difference prices for land in the same area.  I have had land that was priced at priced under $30,000 for 4 or more acres and land that was price over $150,000 for less  than two acres – and they were in the same subdivision!  So why such a difference?  In this example the less expensive lot was on a town road with a limited building envelop (area in which you can build).  The other lot was in the center of the subdivision with exceptional views (Mount Washington, Norway Lake and rolling hiss with farms marching off into the distance).  This is an extreme example, but it makes a point.

Generally, if you are not looking to buy a woodlot, the size of the lot has little to do with the value.  Even if you are looking for a woodlot, the value is more about how much wood is on it and what type and quality of the wood is.

There are subtle differences even within categories.  For example at Frost Homestead there are several view lots within a few hundred yards of each other and they range from $60,000 to $185,000.  They all have the same restrictions, access to the same private tennis/basketball courts and common land and all have the same utilities.  Although all have views, the views are where the difference lies.  The most expensive has 3 types of views – lake, Mount Washington and nearby rolling hills.  The $115,000 lot has views of a nearby mountain.  The $95,000 lots have beautiful Mount Washington views and some rolling hills.  The $60,000 lot has a view of Mount Washington.  The Mount Washington view lots don’t carry the same value as lots with other views.  This may seem strange, but because of clouds and haze you only get a very few days with outstanding views.  The rest of the time you get a marginal view at best.  The other lots get varying degrees of views.  Be sure that if you are getting a really good view that it will be visible much of the time.

If you have more questions about this, feel free to call me at 207 653-9955 or email me at Tom@LandMaine.com

 

Filed in 4-Season, Country Home Sites, land access considerations when buying land, Land buying hints | | Comments (0)

Looking for Land for Sale for a Primary Home Site

Monday, January 23, 2012

Lot 55 at Frost Homestead, Norway, Maine

Primary home sites – things to consider.

  • LOCATION – How far do you want to commute?  This question may be better answered as a time rather than distance question, thus questions like how accessible is a good, open road is important as is the question of how heavily traveled is that road during the time you need to travel.   Generally the further you get from a city, the lower the prices become and more private the lots become.
  • ACTIVITIES NEARBY – How do you like to spend your spare time will determine what works for you.  If you are an avid skier or hiker, that may mean being closer to those activities are more important than the distance to a symphony or shopping.
  • RULES AND RESTRICTIONS – If it is a subdivision, are there association by-laws and deed restrictions?  Do such restrictions provide the protection you wish for this investment?  Do they meet with your value system?  Remember, a large square footage of a house does not mean that it will be attractive.  Would you be required to build, maintain and heat a building larger than you need?  If you want a large home, would you mind a smaller home next door?
  • TOWN AMENITIES – If you have school age children, check out the quality of the schools.
  • FEES AND TAXES – Look at the total cost of Association fees plus taxes.  What do the Association fees cover?  Are the roads town maintained or Association maintained.  We have one area in a town where the taxes are high but the Association fees are low.  In the next town over they are just the opposite with high fees and low taxes.  The total on both places are about the same.  In the first area, the town plows the roads; in the second, the Association does.

Be sure to look at future posts regarding the subjects of what to consider when it comes to soils, utilities, views, etc.

Filed in Land buying hints | | Comments (0)

General items to consider when buying land.

Sunday, January 22, 2012

These thoughts on what to look for when buying a home site are a broad brush look.  See future posts for more detailed thoughts.

  • COST TO DEVELOP THE LOT –
    • UTILITIES – Are the utilities you want (power, cable, etc.) on the road beside your lot?  If not, how much will it cost to bring them to the lot?  Are there any extra fees that must be paid to the utility for the line extension up the road beside the land you are thinking of buying?
    • DRIVEWAY – Unless exceedingly long, the driveway cost shouldn’t be that much extra, but you should verify this.  Also, I have found that plowing a longer driveway doesn’t cost much more that plowing a shorter one because much of that cost is gigging back and forth in front on the house.
    • TYPE OF SOILS – Has there been a passing soils test near the location that your want to build?  Is there ledge?  (Some ledge is generally not too bad, but if you have to blast to put in the septic system and utilities plus the full foundation, you best be sure to know what the cost will be before buying.)  Will there be problems with water – either drainage or water table?
  • VIEWS – If views are what draw you to the lot, be sure you will still have that view 5, 10 or more years from now.  Depending on whether you are looking  -out horizontally, downward or upward – generally figure you need to have 75 feet or so of vertical elevation to keep a view.  Some sellers cut the trees on land you will not be buying so it looks like a good view only to find later you can’t keep the view.  Protect yourself by making sure you own the land that affects the view or have an easement to maintain the view over that land.
  • PRIVACY – What is your need for privacy?  If it high, ensure that it can be maintained when the person next door builds.
  • ONGOING COSTS – Are there Association fees?  If so, how much are they.  How much are the taxes?
  • PROTECTION – If you want to maintain the value of your land, are there reasonable deed restrictions and by-laws to protect you while not causing you to spend more than your want to.  Are those restrictions enforced?

Check our other posts and future posts for other helpful hints.

Filed in Land buying hints | | Comments (0)

What to look for when buying land

Saturday, January 21, 2012

When you are looking for land to buy you should know the answer to these basic questions:

  • What is the purpose for the land- primary home site, vacation home, weekend getaway or . . .
  • What are the most important considerations
    • Water front
    • View
    • Distance from stores, hospitals, . . .
    • Activities you want to be near at this location (golf, museums, skiing, lakes, hiking, . . .)
    • How big a lot do you want (more importantly, what do you want to accomplish with the size)?  More about this in future posts.
    • What are important considerations when you are buying land:
      • Soils
      • If views are important will you still be able to maintain the view years later
      • What is the cost of bringing utilities to your house site
      • If needed, is owner financing available and what should you look for with owner financing.

In future postings I will attempt to share with you my insights based on dealing with thousands of buyers when they have looked at land with me.  I come to this with my experience as a land developer in Western Maine.

Each post will attempt to cover a finite portion of the decision; thus I will address primary home sites in a separate post from one dealing with land for a vacation home.  Common issues like soils and utilities will be in general topics.

When people come to me to look at land they generally know what the purpose is.  My land is generally rural and in Maine; thus my perspective will reflect these experiences.

Filed in Land buying hints | | Comments (0)
Waterford Properties   •   207.743.8703   •   800.566.5263   •   Site Map   •   inquiries@landmaine.com